Farmers lose Php85 billion during first year: Peasant livelihoods destroyed, food insecurity worsened by rice liberalization

by IBON Media

Research group IBON said that rice liberalization has undermined the livelihoods of millions of farmers and most likely even pushed many into bankruptcy. It will only worsen the country’s food insecurity, the group said, as already seen with record high rice imports.

Enacted one year ago, the Rice Liberalization Law or Republic Act (RA) 11203 removed quantitative restrictions on rice importation and replaced this with 35% tariff on rice imports from the region and higher from elsewhere. The law was justified as the solution to high rice prices in 2018. Tariffs from the rice imports were also supposed to fund programs to make Filipino rice farmers competitive, eventually increasing their incomes.

IBON said however that the influx of record rice imports has devastated farmers’ livelihoods. The Philippines imported a record 3.2 million metric tons (MMT) of rice in 2019, surpassing the previous record of 2.4 MMT of rice imports in 2008 by 40 percent. That was the first time that the Philippines gained the dubious distinction of being the world’s biggest rice importer.

Huge rice imports caused palay farmgate prices to plummet, said IBON. The price of palay fell by 22.4% from Php20.14 per kilogram (/kg) in end-December 2018 to Php15.63/kg in the same period in 2019, said the group. Some major rice producing provinces such as Nueva Ecija, Isabela, and Laguna even reported palay prices as low as Php7/kg and Php10/kg.

IBON estimates that rice farmers in aggregate suffered a total income loss of Php84.8 billion in 2019 due to the catastrophic drop in palay farmgate prices. This is equivalent to an average income loss of some Php35,328 per rice farmer.

Farmers groups have reported that as many as 200,000 farmers were forced to stop planting rice due to income losses. Also, at least 3,000 of the country’s some 10,000 rice mills reportedly closed down due to the increase in rice imports.

IBON said that the widespread disruption of rice producers is intentional and the result of free market forces being unleashed on the country’s backward agriculture. The group assailed the economic managers for using high rice prices to justify pushing marginal and so-called unproductive farmers and millers into bankruptcy.

IBON said that the country’s food insecurity is getting worse under the Duterte administration especially because of the low government priority given to domestic agriculture including the rice industry. The country’s rice importation grew from the equivalent of around 5% of total rice production in 2016 at the start of the Duterte administration to 26% of total rice production in 2019. Unprecedented rice imports are exposing the country’s inability to produce sufficient quantities of its staple food, said the group.

IBON said that the rice liberalization policy is another indication of government’s long-time neglect and disregard of local rice production and agriculture in general. The group said that the government should not pit rice farmers and rice consumers against each other. Farmers and consumers have a common interest in the protection and strengthening of the domestic rice industry towards rice self-sufficiency. #

IBON files historic first red-tagging complaint with Ombudsman against Parlade, Badoy, Esperon

By IBON Media

Research group IBON will file an administrative complaint with the Office of the Ombudsman on Monday to hold government officials accountable for red-tagging the institution and many other activists, individuals and groups.

This is believed to be the first case of red-tagging filed against any government official in the country’s history.

Through co-complainants IBON Executive Director Sonny Africa and IBON Board of Trustees Chairperson Bishop Solito Toquero, an administrative complaint will be filed against former Armed Forces of the Philippines (AFP) deputy chief-of-staff for civil-military operations and now Southern Luzon Command chief Major General Antonio Parlade, Jr, Presidential Communications and Operations Office (PCOO) Undersecretary Lorraine Badoy, and National Security Adviser Hermogenes Esperon.

IBON is asking the Ombudsman to hold respondents Parlade, Badoy and Esperon answerable for their malicious abuse of authority and negligent performance of duties as public officials.

IBON is also asking that they be punished for conduct that is grossly disregardful of the public interest, unprofessional, unjust and insincere, politically biased, unresponsive to the public, distorting nationalism and patriotism, and undemocratic.

The group’s complaint is grounded on The Ombudsman Act of 1989 (Republic Act No. 6770) and the Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713).

This is also after requesting the Commission on Human Rights (CHR) to investigate the matter and participating in the CHR’s subsequent inquiry.

IBON said that the complaint was written after a year of constant vilification of it by the respondents.

The most recent, mentioned in the complaint, is when Usec. Badoy called IBON a communist front on the One News program ‘The Chiefs’ in end-January.

This was after IBON Research Head Rosario Guzman fact-checked the PCOO’s ‘Duterte Legacy’ information materials. Gen. Parlade meanwhile spent the first week of February in Australia calling out IBON for supposed terrorist financing.

The complaint enumerates numerous slanderous statements, interviews, articles, and speeches in 2019 and the first weeks of 2020 where Badoy, Parlade, and Esperon red-tagged IBON.

This visibly started in March 2019 when Badoy and Parlade had a press briefing in Malacañang Palace about their February 2019 red-tagging road show in Europe to vilify IBON and other activists and organizations.

They maliciously and publicly accused IBON of “fabricated reports” for the United Nations and European Union and “[radicalizing] students as young as seven years old to eventually become (Communist) cadres”.

Also in March, Esperon named IBON as among Philippine non-government organizations (NGOs) supported by the Belgian government that “act as legal fronts for the CPP-NPA”

The complaint points out that IBON formally wrote the Armed Forces of the Philippines (AFP) and National Security Council (NSC), as well as had a meeting with the latter, to ask for the so-called evidence for the allegations.

However, despite repeated requests, the AFP and NSC have refused to provide anything while purportedly showing these to media, diplomats, government agencies, and even private sector groups.

In the complaint, IBON underscores how the government’s crackdown on progressive groups heightened following the issuance of Executive Order No. 70 (EO 70) in December 2018 creating the National Task Force to End Local Communism and Armed Conflict (NTF-ELCAC). All the respondents are ex-officio members of the NTF-ELCAC.

IBON’s complaint points out how the NTF-ELCAC has launched “a rabid vilification campaign against members of civil society by arbitrarily and unjustly branding them as fronts of the CPP-NPA, which have been declared as “terrorists” by the President.

The CHR, on the Sunday before IBON’s filing of the complaint, also called out EO 70 as using counterinsurgency to justify attacks on human rights defenders and activists.

IBON maintains that it is nothing more than a SEC-registered foundation that publishes its socio-political-economic analysis for all the public to see.

“Its researches enjoy a reputation of being independent, evidence-based, and credible. It is because of this reputation that its researches on social justice, real economic development, environmental sustainability and democracy, among many others, are widely used by various non-government and people’s organizations in pursuit of their own advocacy work,” read the group’s complaint. #

The PCOO’s disinformation must be stopped

by IBON Media

The Duterte administration’s persistent red-baiting of IBON and other groups instead of addressing the issues raised is an affront to the public. The public deserves the truth and to be informed about the issues that matter to them the most. Instead, the government is red-baiting critical voices to silence opposition and to hide the real situation of the country.

IBON Research Head Rosario Guzman and Presidential Communications Operations Office (PCOO) Undersecretary Lorraine Badoy were recently guests on One News’ ‘The Chiefs’ to discuss the administration’s Duterte Legacy campaign. IBON presented data questioning the accomplishments claimed by the PCOO. Instead of addressing the PCOO’s apparent disinformation, Usec. Badoy responded by linking IBON to the Communist Party of the Philippines-New People’s Army-National Democratic Front of the Philippines (CPP-NPA-NDFP). She pressed the point and only relented when the hosts reminded her to stay on topic.

Usec. Badoy’s behavior is symptomatic of the administration’s wholesale attacks on independent groups. It is being done to hide the worsening economic situation, prevent the radical reforms needed to develop the country, and promote its self-serving agenda. Under the pretext of ending the armed Communist rebellion, the Duterte administration cast its net wide and is attacking every group that is critical of its anti-people economic policies and authoritarianism.

The Duterte administration has been most systematic and vicious in attacking those it sees as the greatest threats to its oppressive rule. The government vilifies, harasses, fabricates charges against, and illegally arrests critics and opposition. Human rights defenders have already been violently attacked and even killed under this administration. Usec. Badoy mentioned on the show that she is part of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC). Since its creation in 2018, the NTF-ELCAC and its security apparatus has been implicated in the surge in human rights violations in the country.

President Duterte with PCOO secretary Martin Andanar and Presidential spokesperson Salvador Panelo. (Malacañan photo)

The PCOO is at the forefront of the government’s disinformation campaign to deceive and manipulate the public. For this, its budget has been increased substantially to Php1.7 billion in 2020 from an average of Php1.1 billion under the previous Aquino administration. The 55% larger budget of the PCOO is only going to promote falsehoods on an even wider scale.

IBON has been explaining economic issues to the public for 41 years. The Duterte administration is attacking IBON because we advocate an economy that upholds the people’s interests most of all. As with activists and other groups, we are undeterred and will continue to support the efforts of the people’s movement to reclaim the economy from the elites that have taken it over.

We will also be taking measures to show that we do not condone the people’s money being used for a self-serving political agenda. The PCOO, including USec. Badoy, is just among many who need to be put in their place. #

(Kodao publishes IBON articles as part of a content-sharing agreement.)

Real Duterte Legacy: Three years of slow growth sign of failing gov’t econ policies

by IBON Media

Research group IBON said that the economy is on its third year of slowing growth under the Duterte administration, and the slowest in eight years. This shows that government’s market-oriented policies are failing and its claimed economic gains are myths, said the group.

The Philippine Statistics Authority (PSA) reported 5.9% annual growth in gross domestic product (GDP) for 2019, missing government’s revised target of 6-7% growth for the year. Government attributed this to the delayed 2019 budget and election ban on infrastructure in the first half of 2019 and slowing agriculture due to weather-related factors like El Niño.

IBON countered government’s claim that the budget delay and ban on infrastructure pulled back growth last year, noting that the economy was already slowing prior to this. From 6.9% in 2016, the country’s growth in GDP slowed to 6.7% in 2017 and 6.2% in 2018. The 5.9% in 2019 marks the third year of economic slowdown under the Duterte administration. This is also the slowest growth in eight years or since the 3.7% in 2011, the group said.

IBON said that the economic slowdown is really due to the lack of strong foundation in agriculture and Filipino industry – made worse by government’s faulty market-oriented policies.

Growth in the agriculture sector dropped from 4% in 2017 to 0.9% in 2018, then slightly increased to 1.5% in 2019, the group said. Yet government continues its neglect and low prioritization of agriculture as reflected in the national budget. Agriculture’s share in the 2020 budget is just 3.5% – the lowest since 2004 at 3.3 percent.

Meanwhile, growth in manufacturing drastically declined from 8.4% in 2017 to 4.9% in 2018 and just 3.8% in 2019. The group said this is because domestic consumption and exports have weakened amid a protracted crisis and increasing protectionism in the global economy. Manufacturing is low value-added and overly dependent on foreign capital and technology, and produces for the world market.

IBON said that instead, government has relied on temporary external factors to drive growth, but these are weakening. For instance, overseas remittances are growing at a slower rate, decreasing from 5% in 2016 to 4.3% in 2017 and 3.1% in 2018. This rose to 4.6% in the first ten months of 2019 but is not likely to surpass the 2016 growth rate. Growth in exports are also falling from 19.7% to 13.4% in 2018 and just 3.2% in 2019.

The consumer spending and real estate booms that for a time fueled growth are also losing steam. Household consumption registered 7.1% growth in 2016 but dropped to 5.9% in 2017, 5.6% in 2018 and slightly grew to 5.8% in 2019. Real, estate, renting and business activities decreased from 8.9% growth in 2016 to 7.4% in 2017, 4.8% in 2018, and further fell to 3.7% in 2019.

IBON said that government has been attempting to boost a lackluster economy through more government spending and its infrastructure program. But this was not enough to stimulate growth. For instance, construction drastically fell from 14.9% growth in 2018 to just 7.7% in 2019.

IBON said that the country’s economic situation will worsen as long as government pushes policies that favor big business interests. It should admit its failure and take on real reforms needed to strengthen and develop agriculture and domestic industries and turn around the country’s flagging economy, the group said. #

(Kodao re-posts IBON reports as part of a content-sharing agreement.)

Amid Taal disaster, ‘Duterte Legacy’ disinformation campaign launched

by IBON Media

Research group IBON hit Malacañang’s launching of the ‘Duterte Legacy’ campaign while relief operations are still ongoing for tens of thousands of families displaced by the present eruption of Taal volcano. The campaign is not just rife with disinformation, said the group, but also insensitive politicking for the still distant 2022 elections.

Organized by the Presidential Communications Operations Office (PCOO), the Duterte Legacy Campaign was launched by Malacañang at the Philippine International Convention Center barely a week after Taal volcano erupted. Cabinet officials showcased the Duterte administration’s accomplishments in three “key pillars”: peace and order, infrastructure development, and poverty alleviation.

IBON executive director Sonny Africa criticized the launch for its insensitivity. “The government pleaded lack of relief funds and asked the public for support,” Africa said, “but here comes the PCOO using its bloated propaganda budget for presidential self-promotion conspicuously in anticipation of the 2022 elections.” The PCOO budget which averaged Php1.1 billion a year in 2011-2016 has greatly increased under the Duterte administration to Php1.7 billion for 2020.

Africa said that the PCOO campaign is only the latest disinformation effort of the administration. “The Duterte Legacy Campaign is deceiving the public about the real state of the economy with its selective and misleading presentation of figures.”

The PCOO claims 4.2 million jobs generated through ‘Build, Build, Build’ to hype its impact. Africa said this is an exaggeration though and points out, for instance, that this is even more than the 4.15 million total employed in the construction sector in 2019 reported by the Philippine Statistics Authority (PSA). There is so much double-counting that the number is virtually made up, he stressed.

The 4.5% unemployment rate is meanwhile disingenuous because the figure is only for the October 2019 labor force survey round. The PCOO would be more honest, he said, if they cited the higher 5.1% unemployment rate for the whole year which is already available from the PSA. Africa also said that the supposed 5.9 million Filipinos being lifted from poverty is only because a very low and unrealistic poverty line of Php71 was used to compute this.

IBON pointed out that the Philippine economy is in worse shape because of the unreformed neoliberal policies of the Duterte administration. The group noted that: growth has been slowing since the start of the administration to just 5.8% in the first three quarters of 2019; agriculture grew weakly at just 1.5% and manufacturing slowed to 3.7%. The group also cited government debt bloating to Php7.9 trillion; regressive tax reforms eating away at the incomes of the poorest 60% of the population; high real unemployment at 4.7 million; and more than 12 million families trying to survive on Php132 or less per person per day. #

(This article is being reprinted by Kodao as part of a content-sharing agreement with IBON.)

Real Duterte Legacy: Agri crisis belies admin claims of econ success

by IBON Media

Research group IBON said that the crisis in Philippine agriculture due to government negligence contradicts claimed economic achievements under the Duterte Legacy Campaign. The group said that the administration’s neglect and prioritization of local and foreign big business interests is worsening an already weak and struggling sector.

IBON said signs of this agriculture crisis include slowing sectoral growth; shrinking share in gross domestic product; rising import dependence; increasing trade deficit; significant job losses; and widespread rural poverty.

The Philippine Statistics Authority (PSA) reported a minimal 0.4% growth in agriculture in the fourth quarter of 2019. Under the administration, year-on-year growth trend in agriculture has been declining. From a contraction of 1.2% in 2016, agriculture bounced back with a 4% growth in 2017. But this was short-lived when growth fell to 0.9% in 2018 with a slight increase to 1.5% in 2019, noted the group.

IBON said that agriculture’s share in gross domestic product (GDP) has been declining from 8.8% in 2016 to 8.5% in 2017, 8.1% in 2018, and 7.8% in 2019. This is a far cry from its over 40% share in the economy in the 1960s.

While the country has been increasingly dependent on food and agricultural imports in the past couple of decades, this has further heightened under the Duterte administration, the group said. For instance, the country’s consumption of garlic imports was only 1.1% in 1990, but this surged to 91% in 2018.  Rice import dependency ratio (IDR) meanwhile decreased from 9% in 1990 to 5% in 2016. But this grew to 13.8% in 2018 and could worsen with the increase in rice imports due to the Rice Liberalization Law.

IBON noted that as much as 1.4 million jobs were lost in agriculture, with employment falling from 11.1 million in 2016 to 9.7 million in 2019. This translates to an average annual job loss of 455,000 in this period.

Another indicator of agriculture in crisis is widespread rural poverty, said IBON. Poverty incidence among farmers (34.3%) and fisherfolk (34%) is higher than the national average (21.6%), according to latest available figures. However, IBON estimates that at least 90% of farmers and fisherfolk are impoverished, if based on more reasonable standards of poverty measurement.

IBON said that despite its worsening state, the agriculture sector remains low priority for the administration. The 3.5% share of agriculture in the 2020 budget is the lowest since 2004 at 3.3 percent. The group also noted that annual average share of agriculture in the national budget from 2017 to 2020 was just 3.6% – the lowest since the Ramos administration (3.5%).

IBON said that agriculture, hand in hand with domestic manufacturing, is an important productive sector that, if supported and strengthened towards public interest, could help boost and sustain genuine development and job creation. The administration’s continued neglect of the sector and advancement of harmful pro-big business policies that are destroying local production and farmers’ livelihoods only shows how fake the Duterte Legacy really is, the group said. #

Water you up to, Mr. President?

By Sonny Africa

Pres. Rodrigo Duterte is posturing against oligarchs again. This time, the tough talk is against corporate water giants Manila Water and Maynilad. It is a popular and justified stance – the firms make billions of pesos every year while consumers suffer expensive water and incomplete services.

The hope is that this comes from a real understanding of water as a human right where the oligarchy’s profit-seeking is seen as hindering the realization of this right. Or it might just be populist posturing against some oligarchs rather than the oligarchy.

Presidential threats

Pres. Duterte tapped into public outrage against the country’s water barons when he threatened the Ayala family and businessman Manny Pangilinan. They helm concessionaires Manila Water and Maynilad, respectively. At a speech in Malacañang, the president angrily said that Filipinos are poor because oligarchs dominate the economy.

He said he would take action against them even if this made the country a pariah in the international community and among investors. Anyway, he said: “We can start from the beginning… nandiyan naman si Villar” (Villar is there). The uneasy reference to richest Filipino Manny Villar, whose rapidly expanding PrimeWater venture makes him the country’s fastest-rising water baron, only fueled criticisms of cronyism in play.

The president also called on his audience – including senators, cabinet members, and business folks – to stop this “business of milking the people.” At the end of his short speech, everyone rose to their feet clapping.

The government seems serious about going after the two Metro Manila water concessionaires. The Solicitor General said it will pursue ‘all remedies’ to contest the water arbitral rulings that worked against the government. The justice department identified a dozen provisions making the water concession agreements (CAs) ‘onerous’. To remedy this, the finance department is drafting replacement contracts supposedly more favorable to the government and the public.

The Metropolitan Manila Waterworks and Sewerage System (MWSS) said that it will cancel the irregular 15-year extension of the CAs beyond 2022 to 2037.

Pres. Duterte himself threatened to file economic sabotage cases against the water firms and government officials involved in the disagreeable water deals. When the new water contracts are drafted, he said the water firms can basically take it or leave it. He reportedly also promised to make the lives of the Ayalas and Pangilinan “very, very, very miserable”. Among others, he threatened to slap each of the billionaires and offered this as some kind of catharsis to Filipinos.

The posturing seems to have paid off. The water firms are reportedly waiving the Php10.8 billion awarded to them by their respective international tribunals – Php3.4 billion for Maynilad and Php7.4 billion for Manila Water. The firms will also defer higher water rates scheduled for January 1, 2020 and renegotiate their contracts.

Still, water privatization

So are things, finally, all settled on the water front? Unfortunately not, if the government still sticks to its water privatization policy.

Many of the issues raised by the Duterte administration echo issues raised long ago by the Philippine mass movement (which includes many organizations now being vilified and attacked by the government). Progressive groups criticized water privatization and the CAs from the time that they were being negotiated in 1997. The Water for the People Network (WPN) meanwhile was at the forefront of civil society campaigning in 2013 against water rate hikes bloated by corporate income tax, non-implemented infrastructure projects, and a host of other irregular items.

Thus government’s apparent epiphany is welcome to the extent that it moderates corporate water profiteering. This relief is long overdue. Since the start of water privatization, water rates have increased seven-fold in the West Zone under Maynilad (573% increase) and ten-fold in the East Zone under Manila Water (871%). These rate increases far outpace inflation over that same period.

Water privatization proponents often justify expensive water with the argument: “The most expensive water is no water.” Yet beyond the catchiness, the reality is that water has become unaffordable especially for lower income families. The United Nations Development Programme (UNDP) suggests that water costs should not exceed 3% of household income. Yet WPN, in its studies in 2013, found poor families in Metro Manila paying as much as 7-22% of their household income for water which is so basic to survive.

The rate increases support huge profits. In 2013, WPN noted that the two water firms had returns on investment conspicuously higher than in telecommunications, power and housing. In the last 15 years, Maynilad made around Php68 billion in profits and Manila Water some Php61 billion. In 2018 alone, the water firms raked in around Php6.6 billion in profits each. Profits are also boosted by increasing water demand from explosive Metro Manila urban over-development – meaning that the Ayala group, also a major real estate developer, profits twice over.

Water rates and the water firms’ profits would be even higher if large water rates hikes had not been stifled following citizen- and mass movement-driven protests and campaigning in 2013.

The ‘losses’ claimed by the water firms and brought to arbitration are largely about the corporate income taxes that they were disallowed from charging to water consumers. These are potentially enormous and, in the case of Manila Water, would have summed to around Php79 billion passed on to consumers from 2015-2037.

Under an unchanged framework of privatization, there are reasons to doubt whether government’s renegotiated concession agreements will be able to completely rectify these problems. The basically profit-driven approach is inappropriate and will inevitably result in contracts still unnecessarily skewed towards ensuring private profit even at the expense of social objectives.

Privatization means having public utilities and social services run by the private sector. The private sector is assumed to be inherently more efficient than the public sector and, hence, able to provide the utility or service better. The better services, it is argued, justify the more expensive prices and resulting profits.

The new renegotiated contract terms are still undetermined so it is hard to say how far two decades of expensive water and unmet sanitation targets can be corrected. Still, the global experience with water privatization may provide some clues of the prospects.

Reversing water privatization

By now, many may believe that water privatization is commonplace. Yet water privatization really only started in the 1990s and the 1997 privatization of MWSS was actually one of the first and the biggest at the time.

Privatized water is actually a minority worldwide and even in retreat.

There are around 500 large cities worldwide with a population of over one million, including the big cities in Metro Manila. Despite the wave of water privatization starting in the 1990s, 82% of these cities and their populations are actually still served by public providers.

Moreover, privatized water has been in retreat in the last decade or so. Many of the reasons for this happening abroad are familiar to Metro Manila residents: steep water rate increases, inadequate service coverage, insufficient infrastructure investment, opaqueness, and lack of accountability.

Driven by the incompatibility of the human right to water with privatization, more and more water services have been nationalized since the mid-2000s. Erstwhile privatized water services in at least 267 cities in 37 countries have returned to, or are in advanced stages of returning to, public sector hands. Nearby, this includes Jakarta in Indonesia and Selangor in Malaysia.

Elsewhere in Asia, water services are being nationalized in India and Kazakhstan. This is also happening in countries from Argentina to Uruguay in South America, from Ghana to Tanzania in Africa, from France to Sweden in Europe, and even in the US and Canada. Uruguay and the Netherlands have even gone so far as making water privatization illegal.

The nationalization of water services – or ‘remunicipalization’ as it is also called – occurs at many levels. It has been literally national in Uruguay, regional as in Argentina, city level as in Indonesia, and at the municipal or community level as in France and the US.

Water for the people

Nationalization is the real alternative to water privatization. It is the best way to ensure that water is provided as a service instead of operated as a business.

The concession agreements should be terminated as the starting point for returning Metro Manila water services to full public ownership, management and control. Government officials and the water firms should also be held accountable for over two decades of water service misdeeds.

There is a seemingly powerful counterargument to renationalizing water – why return Metro Manila water services to the government which did such a poor job of running it over two decades ago and was the reason for privatization to begin with? Privatization is flawed, it is argued, but public water is worse.

The concern is legitimate. Metro Manila water services in the 1990s certainly needed much improvement. Yet the Metro Manila and global experience these decades past are strong arguments that water should be run as a public service rather than as a business.

The drive for profits is so powerful as to override social concerns. Businesses are inherently profit-seeking and will necessarily put profits above social considerations – otherwise, they would not be businesses any more. Governments on the other hand are supposed to put social considerations above all.

Businesses will always charge a profit premium. Apparently, they will also underinvest if this will make their profit-seeking risky. In effect, water businesses will give people the water services they want as long as these are water services the business wants to give. If forced to do otherwise they will not also not hesitate to bring the State to court.

Which raises the question – how can the government improve how it runs water services? First of all, we can rule out privatization for that. The MWSS has overly relied on the water concessionaires over the past two decades. Not only has it foregone building capacity over that period, it even eroded whatever capacity it already had.

The government should seriously consider options not relying on profit-maximization. Profit-seeking underlies all variants of privatization and public-private partnerships (PPPs). There are, for instance, public-public partnerships (PUPs). These are collaborations between two public authorities on the basis of solidarity and the spirit of improving public services.

The Public Services International Research Unit (PSIRU) already reports 137 water service PUPs in around 70 countries as of 2018. PSIRU even observed that “the number of implemented PUPs largely exceeds the number of privatized contracts in the global water sector”. Such not-for-profit partnerships to build non-commercialized water and sewerage systems are the most appropriate capacity-building arrangements for realizing water as a human right.

Democratic public water

Giving citizen groups a greater role in water services can also help check corruption, abuses and inefficiency. It is already well-established that civil society organizations are vital for reflecting needs of local communities, mobilizing these to support policies and projects, and holding governments accountable. Democratic and transparent governance is not easy – but it is necessary and possible.

The political and economic interests behind neoliberalism understandably oppose nationalization of water services. This would be a direct rebuttal of their claims that corporate profit-seeking can deliver the public service that people need and deserve as a matter of human right – and on such a huge and profitable flagship privatization project as Metro Manila water no less. It is also inconsistent with the market-biased and foreign investor-friendly preferences of economic policy elites.

There is however more than enough reason to let go of the cherished neoliberal dogma that pursuing private gain through free markets is the best way to achieve optimal social outcomes. The last few months have already seen protests and uprisings around the world. Although appearing to be on disparate issues, their common root is the neoliberal economic model imposed on populations worldwide for nearly four decades. This has caused such dire consequences for so many.

In the Philippines, nationalization of water services would be a significant beachhead to advance the counterattack against neoliberalism and reclaim the economy for the people. Which is exactly why the Duterte administration, for all its posturing, is most unlikely to go in that direction. As always, sustained social and political dissent is the key to upholding the interests of the majority –indeed, more than ever in these times of neoliberal authoritarianism. #

Govt methodology underestimates number of poor Filipinos—IBON

Research group IBON said that the government methodology to count the poor grossly underestimates Philippine poverty. The recently released 2018 poverty statistics can be taken to mean those in extreme poverty but IBON says that many other poor Filipinos are left out.

The Philippine Statistics Authority (PSA) explained that Republic Act 8425 of 1997, or the Social Reform and Poverty Alleviation Act, defines “poor” as “individuals and families whose income fall below the poverty threshold as defined by the National Economic and Development Authority (NEDA) and/or cannot afford in a sustained manner to provide their minimum basic needs of food, health, education, housing, and other essential amenities of life.”

The number of poor are counted as the number of Filipinos whose incomes fall below the poverty threshold or the minimum amount needed to meet basic food and non-food needs. Using official data on provincial food bundles and prices, the methodology first computes the subsistence threshold or the minimum amount a family needs to meet basic food needs. The subsistence threshold is then assumed to be 70% of the poverty threshold where the balance of 30% is assumed enough to meet basic non-food needs.

The number of poor are estimated using family income data from 180,000 sample households from the provinces and highly urbanized cities. Filipinos whose incomes are below the poverty threshold are those officially counted as poor.

However, poverty estimates according to this methodology are unbelievably low and unrealistic. The monthly poverty threshold is just Php10,727 for a family of five. This is just around Php71 per person per day at Php50 for food needs and Php21 for non-food needs.

These low standards explain the reported fall in the number of poor Filipinos. Poverty incidence, or the percentage of poor families to total families reportedly fell from 23.3% in 2015 to only 16.6% in 2018, and the number of subsistence or food poor Filipino families from 6.4 million in 2015 to only 3.4 million in 2018. NEDA hailed government’s poverty reduction measures for successfully getting poverty alleviation on track.

IBON however said that the methodology uses unrealistically low standards and is detached from daily poverty realities.

The food or subsistence threshold, for instance, the group said, conservatively assumes a “least cost” food bundle. It is unrealistic to expect that all families have ready access to this lowest-priced or cheapest food, the group argued. Moreover, the food bundle is based on so-called “revealed preference” which is presumably based on actual spending. Yet IBON said that this is not necessarily a desirable food bundle and may just reflect the food that Filipino families are forced to buy or make do with given their poverty or limited budget, such as the notorious pagpag or recycled garbage food.

These mean that the subsistence threshold estimated is over-optimistically low and not necessarily of the needed quality for decent eating.

Estimating non-food expenses, meanwhile, does not take into account the actual cost of basic non-food items, IBON said. The cost of non-food needs is merely assumed to be a certain ratio to food needs. However, the cost of many non-food needs has been rising rapidly for instance due to the privatization of utilities and social services. Non-food needs include clothing and footwear; fuel, light, and water; housing maintenance and other minor repairs; rental of occupied dwelling units; medical care; education; transportation and communication; non-durable furnishing; household operations; and personal care and effects. Thus, this also too conservatively assumes that non-food needs are available at illusory low prices.

IBON stressed that poverty has many dimensions and while income is a convenient indicator this is only one of them. The current low Php71 poverty threshold should be adjusted to be more realistic and reflective of the true potentials of the economy, said the group. As it is, PSA data indicate that around 12.4 million families or about half of the population is trying to survive on Php132 per person per day. On the other hand, chief executive officers of the country’s biggest corporations can earn the equivalent of as much as Php60,000 or more per day.

IBON said that a more realistic and higher poverty threshold will send a strong signal of the government having ambitious anti-poverty targets and genuinely seeking to eradicate this. On the other hand, persistently low poverty thresholds and illusory reductions in poverty will only result in persistent neglect of the needs of the many.#

Renegotiation of CA not enough without renouncing privatization –WPN

by Water for the People Network

The Water for the People Network (WPN) said that government should renounce water privatization and assert water as a human right whose provision should be under effective public control. This is the most important basis for terminating the concession agreements (CA) between the State and private water firms. The vital public utility should be returned to the public sector, WPN said, and not remain in the hands of profit-seeking water oligarchs.

President Duterte recently ordered the CAs between government and water firms Maynilad Water Systems Inc. and Manila Water Company to be renegotiated. Department of Justice (DOJ) Secretary Menardo Guevarra said that certain provisions of the water CAs are onerous and disadvantageous to both government and consumers. The DOJ began reviewing the CAs upon the instruction of President Duterte at the height of the water crisis during the first quarter of this year.

The onerous stipulations recorded by the DOJ include prohibition against State interference in rate-setting, indemnification for revenue losses due to this interference, and irregular extension of contracts by 15 years. These are issues that have been raised by water rights advocates, WPN said, in the more than two decades since water in Metro Manila was privatized.

“The WPN has long and repeatedly called for the scrapping of the CAs. The CAs are the very epitome of water privatization, which has failed to deliver promised cheaper, cleaner, and more secure water services,” WPN spokesperson Prof. Reggie Vallejos said. Water utilities have to deliver water as a human right, he stressed, and mere renegotiation of the CAs will not truly ensure public interest objectives over private profits.

“The government has not yet revealed its points for renegotiation but we doubt that these will be enough to uphold the public welfare if they are still within the failed water privatization framework and biased towards profitability for water oligarchs,” Vallejos said.

WPN recalled that water privatization has only resulted in more expensive water, with rates increasing seven-fold for Maynilad and ten-fold for Manila Water from the start of the concession in 1997 to the third quarter of 2019. The CA-directed rate rebasing every five years since privatization allowed firms to make profits by charging consumers increasing tariffs including, among others, for projects that fail to push through. WPN added that the CA gives government a key role in rate-setting (judging whether enumerated expenses were prudent and just in the interest of consumers), but nonetheless allows the companies to sue the State should its regulation affect their profit-making.

The water firms also face Supreme Court-imposed penalties for violating the Clean Water Act, with poor sewerage services performance versus targets as of 2018. Meanwhile, water service interruptions have been hounding Manila Water and Maynilad consumers since March 2019.

These problems bring us back to 1997, WPN said, when the Ramos administration invoked a national water crisis and handed over water sourcing, processing and distribution to the private sector. The huge socially-sensitive water utility was handed over to the Ayalas and Lopezes. The biggest water privatization until then was perfectly in tune with the Ramos government’s grand promotion of globalization policies including deregulating the oil industry and liberalizing Philippine agriculture, said the group.

Public sector water operations should be re-established in Metro Manila and the rest of the country as soon as possible, said Vallejos. “These should be returned to the public sector to ensure that profit-seeking does not get in the way of delivering cheap, clean, and secure water services to the public,” he said.

WPN cited the growing global trend of water remunicipalization reversing water privatization. This has already happened in over 231 cities in some 37 countries around the world for instance in Spain, Germany, Argentina, and even in France, home to water multinationals. The poor experience with water privatization is making governments choose public water sourcing and distribution over private control, the group said.

Government’s continued implementation of water privatization is seeing additional oligarchs taking over public control of water, said WPN. Specifically, these are big business interests close to Duterte, for instance, Manny Villar and Dennis Uy who are also in the water business through Prime Water Infrastructure Corp. and Udenna Water and Integrated Services, respectively. Prime Water has been striking joint venture agreements with local water districts in areas nationwide but undermining water services according to a Commission on Audit report, WPN observed.

Simply renegotiating the CAs to let more oligarchs keep profiting from the water business will not remove the ill effects of privatization on the public and may even make it worse, WPN said. Government must bravely decide to take control of the vital public utility and run it as a service rather than for profit, the group said. #

Counterproductive counterinsurgency

By Sonny Africa

Development policymaking is hard enough as it is – the Philippines after so many decades of so many development plans is a case in point. Now the military wants to take that over as well? The government’s whole-of-nation approach where the military hijacks governance will just make the country’s maldevelopment worse.

Authoritarian creep

Pres. Rodrigo Duterte’s authoritarianism of course started with a big bloody bang – the thousands of urban poor the government killed in a show of intimidating force. The militarist takeover of government took a little bit longer but is well underway. The transformation has a thin veil of legality but the nation is as far away from real democracy as it has ever been.

The Duterte administration’s brand of militarism started with the National Security Policy (NSP) 2017-2022 it released in April 2017. Conspicuously, national security was defined broadly to “[encompass] virtually every aspect of national life and nation-building” where “economic development and security are inextricably linked”.

While conceptually valid, in retrospect these were less a sign of vision than gross and insidious ambition. It is difficult to credit a military establishment notorious for human rights violations, unwarranted violence, lying and deceit with having positive long-term aspirations. On the other hand, the appetite for dictatorship is easier to see.

The National Security Council (NSC) prepared the NSP. This collegial body includes many Cabinet members and legislators but is really dominated by the security sector – especially by the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP).

The broad definition of national security was immediately used to give the military and police an entry point into everywhere else in government. Executive Order (EO) No. 16 was released simultaneously with the NSP. This directed that “all government departments and agencies, including government owned and controlled corporations (GOCCs) and local government units (LGUs), shall adopt the NSP 2017-2022 in the formulation and implementation of all their plans and programs which have national security implications”. This is a far-reaching mandate because, according to the NSP, virtually everything has national security implications.

This was followed by the National Security Strategy (NSS) in 2018. The NSS was prepared by National Security Adviser Hermogenes Esperon and presented as a “blueprint [to] foster better coordination, synchronization and cohesion of government functions”. Its sweeping strategy included “the combined, balanced and effective use of the instruments of national power, namely: political and legal, diplomatic, informational, intelligence, economic, and military and law enforcement”.

Ominously, Pres. Duterte called for Filipinos to “stand behind our national security apparatus” and “strengthen the foundations of a secure, peaceful, modern and prosperous Philippines”. Towards this, the president gradually appointed 73 military and police officials to civilian positions in at least 46 agencies. There are now more military and police officials in government than at any time since the Marcos dictatorship nearly 50 years ago.

They were made heads in 38 of these as Cabinet secretaries, director generals, chairpersons, executive directors, administrators or presidents. As it is, former military and police officials account for 11 of 50 cabinet and cabinet-level officials or one-fifth of the Cabinet.

President Rodrigo Roa Duterte presides over a meeting with the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) at the Malacañan Palace on April 15, 2019. SIMEON CELI JR./PRESIDENTIAL PHOTO

Authoritarianism now

All this fell into place when Pres. Duterte issued EO No. 70 in December 2018 creating the so-called National Task Force to End Local Communist Armed Conflict (NTF-ELCAC). The EO invoked the armed conflict to justify creating the task force and institutionalizing a “whole-of-nation approach” that will “integrate and harmonize the various efforts of the whole of government and of all sectors of society”.

Pres. Duterte is National Task Force Commander and chairperson with Esperon as vice chairperson. This places Esperon second only to the president at the top of an expansive organizational structure encroaching on virtually every government agency that matters, reaching from the regional to the barangay level nationwide. They preside over 18 Cabinet officials and two private sector representatives.

The high-level task force includes the secretaries of national defense, interior and local government, and justice as well as the AFP chief of staff, PNP director general, National Intelligence Coordinating Agency (NICA) director general, and Presidential Adviser on the Peace Process. Propaganda is handled by the Presidential Communications Operations Office (PCOO) Secretary.

To cover socioeconomic development concerns, the group also includes the secretaries of economic planning, finance, budget and management, public works and highways, agrarian reform, education, and social welfare and development, as well as the Presidential Adviser for Indigenous People’s Concerns, National Commission on Indigenous Peoples (NCIP) chairperson, and Technical Education and Skills Development Authority director general.

The 17 regional task forces (RTFs) under the NTF-ELCAC are each chaired by a Cabinet Officer for Regional Development and Security (CORDS) designated by the president. The military and police officials in the Cabinet are handy for this — eight (8) of the 17 Cabinet members appointed as CORDS are former military officers: Esperon (NSA), Carlito Galvez (Presidential Peace Adviser), Eduardo Año (DILG), Gregorio Honasan II (DICT), Roy Cimatu (DENR), Eduardo del Rosario (HUDCC), and Delfin Lorenzana (DND).

The RTFs supplant regional structures in place and merge the existing Regional Development Councils (RDCs) and Regional Peace and Order Councils (RPOC). RDCs are the highest policy-making and direction-setting bodies for overall socioeconomic development in the regions. The RDC is composed of all governors, mayors, and development-related line agency regional directors. Upon EO No. 70, RDCs are also adding active military and police officials as special non-voting members.

RPOCs take up major issues and problems affecting peace and order. RPOCs are also composed of all governors, mayors, peace and order-related line agency regional directors, plus AFP commanders. Similar task forces are organized at the provincial, city/municipal, and barangay level. In effect, all these far-reaching multi-stakeholder bodies are put in a direct chain of command under the NTF-ELCAC and the national security adviser. This cumulatively amounts to hundreds of task forces nationwide and potentially even thousands if barangay efforts are counted.

The NTF-ELCAC’s seemingly disproportionate budget of just Php522 million belies its influence. All the memorandum circulars implementing EO No. 70 are clear that “the budgetary requirements for the implementation of EO No. 70 may be authorized chargeable against the respective LGUs and agencies in accordance with EO 70”. Regular agency budgets are put at the service of the NTF-ELCAC.

The NTF-ELCAC is fully up and running. The first RTF-ELCAC was organized in CALABARZON in February 2019 and the first provincial PTF-ELCAC in Cavite in March soon after. The national task force approved its National Plan in its first meeting in April 2019, held in Malacañang.

Other regions and provinces followed suit to organize their respective task forces. One-day island group summits of regional task forces were held in Luzon, Visayas and Mindanao in October to all culminate in a national summit with Pres. Duterte.

This year has already seen a frenzied surge of EO No. 70 implementation-related activity at every level of government across the country. This has gone far beyond armed conflict areas and the government’s militarism has intruded into schools, urban poor communities, offices, media, embassies, international agencies, and elsewhere. A National Capital Region (NCR) task force was even created in September 2019 even if there are no signs of armed conflict or insurgents in Metro Manila. The NCRTF-ELCAC is a hammer and activists, critics and political opposition are the nails it will be used on.

President Rodrigo Roa Duterte presides over a meeting with the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) at the Malacañan Palace on April 15, 2019. SIMEON CELI JR./PRESIDENTIAL PHOTO

Hijacking development

EO No. 70 implementation includes weaponizing the law and criminalizing dissent. But it also in effect enables the military to hijack socioeconomic development policy for its militarist ends. Having construed national security and addressing the roots of armed conflict expansively, the national task force is broadly “authorized to evaluate, modify or integrate policies and programs” of government according to its plans.

The recent midterm update of the Philippine Development Plan (PDP) 2017-2022 is a case in point. This is regularly done for PDPs but there was something new this time around. Supplementary guidelines were issued to RDCs to “integrate” the NTF-ELCAC’s Cluster Implementation Plans in the updated regional development plans (RDPs) and regional development investment programs (RDIPs).

Accustomed processes were overridden and the NTF-ELCAC gave the RDCs plans to “mainstream” in the update. Regional planning committees were assigned to clusters as defined by the NTF-ELCAC, all of which had military officials from the defense department and AFP as members.

The national task force members include 18 government agencies. The various program clusters of the NTF-ELCAC implementation plan include most of these and 38 others, for 51 agencies in total. At least some of these agencies have created NTF-ELCAC “steering committees” to implement EO No. 70 and operationalize the national task force within their respective departments.

The problem with the national task force and the extensive machinery it creates is that it is, underneath a lot of development-speak and bureaucratese, still just another military scheme driven by a narrow-minded enemy-focused military mindset. It is essentially the Duterte administration identifying ‘enemies’ and using the full force of government against them.

EO No. 70 is not the military suddenly genuinely getting insights about the roots of underdevelopment and, much less, suddenly having the skills set to address this. The military is using the task forces to command resources for community programs, welfare services, and the like for its narrow counterinsurgency and anti-activism purposes. This muddles decision-making and prioritization according to actual development needs.

EO No. 70 is also being used to justify State security forces cracking down on development NGOs, people’s organizations, and all civil society groups whose advocacies the administration deems overly critical and putting it in a bad light. More to the point — the government is using all its political, legal, diplomatic, informational, intelligence, economic, military and police resources against any perceived domestic political opposition. In short, using all “the instruments of national power”.

The Duterte government is systematically going after organizations of workers, farmers, urban poor, youth, teachers, indigenous peoples, environment advocates, alternative media, cultural workers, disaster responders, and even researchers. Freedom of expression, freedom of assembly and even freedom of thought are under siege with the government deciding and enforcing what is and is not acceptable.

This gravely sets back prospects for real and democratic development. Curbing civil society suppresses a crucial check on government, stifles fresh development ideas upholding the rights of the majority, and constricts people’s participation in governance.

President Rodrigo Roa Duterte presides over a meeting with the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) at the Malacañan Palace on April 15, 2019. KING RODRIGUEZ/PRESIDENTIAL PHOTO

What is it all for?

At one level it is the Duterte administration coming down hard on the strongest voices against its authoritarianism, corruption, and policies enriching elites at the expense of the people. It is the Duterte clique putting down organized opposition to its self-serving agenda to stay in power and enrich itself.

But it is also much more than that. The Duterte government has come but, as with others before, it will also go. Unfortunately, what is happening is also the State pushing obsolete neoliberalism forward by eliminating obstacles to the market and to capital dominating every aspect of Philippine society. The groups being attacked have their own stresses and versions but nonetheless share a vision for a more just, humane and democratic Philippines.

This is consequential for the country’s political and economic prospects. We are in the middle of the Left and social movements violently being put down, under a thin veneer of rule of law, to increase the power of capitalists, landlords, and political elites. Activists are targeted because their clear politics, concrete organizations, and advocacies threaten the ruling class’s grip on power.

The ruling class embraces the Duterte government because it increases their wealth and profits: tax cuts on the rich and big corporations; infrastructure to keep the comprador economy humming and to preserve real estate wealth; privatization of transport, water, health and education; wage repression; land monopolies; and market- and capital-friendly policies all around.

The Philippines is in dire need of reforms and the sheer scale of the problem demands system-wide thinking and massive mass movement solutions. Yet the heavy-handed authoritarianism and military meddling in governance will just stoke even more unrest. This includes polarizing the nation and actually fueling the radicalism, and revolutionary armed struggles that the Duterte administration is so fearful of. #

(Kodao publishes IBON.org’s reports and analyses as part of a content-sharing agreement.)